How does BBT gets a 17 PE

USB, cap gains and divs, has doubled in 10 years. WFC and PNC have gained as well, but not so much. So Mr. market may reward USB with a safety premium not in WFC and PNC. Although they likewise made it through the crisis.

Still, I apprecite your sharing your wisdom and maybe in thenfuture as we move farther away from the great bank crisis and if we don't get another PNC will indeed reward you with your 100%. You now have me looking into it myself.

USB isn't cheap. The one thing I don't like about USB is that it has grown very little since 2000. Obviously this allowed them not to implode but they didn't take advantage of the credit crisis in the same way other strong banks WFC and PNC did.

They have always shown this reluctance. I have a feeling USB cares more about having the number #1 ROE, #1 ROA then making the most amount of money. I mentioned to people on the USB board A company which earns 10% on equity is more valuable then one earning 40% if the one earning 10% pays no dividend and the one earning 40% pays 100%. Assuming the cost of capital is say 7%. That is because the company earning 10% will grow its earnings 10% a year while the other one will stay put.

USB is the second bank. PNC and WFC could get just as high ROE's and ROA's as USB had they not expanded but in the future they are more valuable.

Also USB at its current price is pretty correctly valued. I think its worth 33 to 35 or something. So nothing cheap since I think PNC is worth $100 and WFC $40. These are fair values not recession pricing. BAC I think is worth $10 under worst case scenario pricing. SO at $5 it met my criteria. I usually only like to buy stocks I think I can make 100% risk free. So because of this I don't own many stocks. They are hard to find.

Yeah, i thought about BAC at $5. In fact, when yer typical idiot Yahoo poster posted something about once it went under $5 it was lights out, funds can't hold below $5, etc., I said $5 meant nothing as some kind of proverbial rubicon.

And i have kep that thread going ever since. As in, up 10%, 25%, etc., since $5.

It's now over 40% in a month.

Well-played.

Like I said, I'm chicken. I bought BBT in early November 15% ago. But I could see PNC too. or USB. You seem to prefer PNC at these prices to USB.

I'm keeping my eye on you. Always good to find someone who knows what they are doing on these boards. Just adds to my body of knowledge, such as it is.

Ya on the surface PNC was garbage but they did everything well when you look into the numbers.

I am just saying BB&T is not cheap compared to other U.S. Banks. It trades at 1.7 to 1.8 to tangible equity with a 14% ROE but its getting better so maybe they can make 16%. Thats below WFC and PNC still who make 16.5% but WFC trades at 1.6 and PNC 1.3. USB has 2.2 and earns 22% on ROE but has more leverage PNC has the least. BB&T and USB have 2 more turns of leverage than WFC and 4 more than PNC.

So as leverage goes back up PNC is the most likely to benefit from adding more since USB and BB&T are closer to the cap.

Anyways yes BB&T is cheap right now but comparatively it is the most expensive game in town.

Perhaps you are right. BBT is fairly valued and WFC, PNC and USB are undervalued. But why spend so much time moaning here and go talk up those banks on their boards?

And yes, tangible book is a fine metric, and as you concede, BBT is not really unfairly valued. It just appears to you that the others are undervalued, and comparatively BBT overvalued versus its brethren.

you shouldnt be investing in banks if you thought PNC had a bad quarter reread it

Also BB& price to tangible book is above WFC, PNC and USB. And its ROTE is well below those 3. Its price makes no sense compared to other banks but perhaps compared to real value. Since all U.S. banks are really undervalued except bbt

PNC's report was not disappointing you need to look through the numbers better. PNC is a 1000 times better bank than BBT and price to tangible book BB&T is near the highest well higher than WFC, PNC or USB.

I do tangible book since goodwill is to be valued by the investor not some arbitrary price.

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